A derelict and partially completed hotel of the Pacific Investments Ltd at Sopu has been sold by the Westpac Bank of Tonga to Government for a mere $1 pa'anga.

The company who took a multi million pa'anga loan from the bank to construct the hotel went into receivership six months after failing to repay its loan.

Westpac Tonga General Manager, Ashleigh Matheson announced on March 18 that the bank had signed agreements with Government to sell the hotel for $1 pa'anga.

"For a contract to be valid a sum is involved, so the $1 was just a token price," he said.

"Because of serious building concerns and flaws identified by a structural report on the building it would be irresponsible for us to allow anybody to complete the building without rectifying the serious building flaws and defects. The building does not comply with Tonga's strict building codes and presents serious danger to guests and public if allowed to operate in its present state," he said.

Ashleigh said after discussion with the Prime Minister Hon Dr Feleti Sevele on how to utilise the building materials, the Prime Minister recognised the opportunity to take apart the building and ship materials to the Niuas to help with the reconstruction work following the tsunami.

He said that although this had been an extremely costly exercise for the bank they were pleased at the outcome and that the building materials would be used for a good cause and help those in need.

"There is a need to do things properly and comply with the law and building codes. The damage that would be done to Tonga's reputation around the world would be horrendous if the building collapsed and people died as a result of substandard building practices being condoned."

Defects

The building is a two-storey timber-framed construction, with weather-board cladding, with the interior lined with a plasterboard product. The roof is timber-framed, supporting a profiled steel roof.

In a detailed engineer's report dated November 2009, on the structural review of the building commissioned by the bank and conducted by Kramer Tonga Ltd, it highlighted structural and building deficiencies, which would potentially cost millions to fix.

The report concluded that the building had significant issues to be rectified in order for it to be safely brought into use

The land is located in the swamp area in Sopu, and was reclaimed specifically for the project.

Saia Moehau is the only shareholder that has been identified with Pacific Investments Ltd.